Is regular use of services like Klarna a bad sign?

[navystrap]

I'm dating a guy my age, both mid 40's for about a year and a half. Its mostly going well. He works a fulltime job although it's minimum wage but lives in a shared flat. I have my own flat and also work fulltime and earn a bit above minimum wage. We do like to go out and do things, eat out, to go on holiday a couple of times a year and enjoy life although I do get a bargain and live within my means. However I'm noticing that he seems to make use of services like Klarna, PayPal options to split payment into three and when he had an emergency last year and needed £1000 he literally didn't have it and needed to pay it up over a few months.

We are talking about moving in but I am worried about his finances. I probably don't save as much as I should but I do have an emergency fund and ensure that is topped up before I buy nice things and that my bills are paid. He's a really nice guy and I feel like money shouldn't stop me being with someone but I am also just a bit wary of financial problems.

I would think it was personally. A one off on a large planned purchase that’s affordable less so, but regular usage and always paying for past purchases would be a red flag that we were incompatible in a financial mindset sense.

You'll have to either curtail doing the things you want because he can't afford it, or subsidise him in order to enjoy his company.
Neither are good options.
He's a financial liability.

Finance products, it always depends how people use them.

He has enough to cover the cost and uses Klarna etc because it means more of the money is sitting in his account earning interest for longer, rather than paying it out - fine. Sensible, actually, when they're interest free.

He's buying things he can't actually afford yet and relying on the split payments to manage, then he has poor impulse control and not a great attitude to his financial affairs.
Date, don't live with and don't combine finances.

Please learn from my experience and if you move in together suggest you sit down and share credit files.

Don't take out any joint financial products.

Does he pay his way when you go out?

Has he retirement plans in place?

@WrylyAmused I think he is using it because he doesn't always have the cost to cover things. He has an expensive hobby which I think he hopes to turn into a career but that is probably a pipe dream to be honest.

@Justmuddlingalong I don't have the money to subsidise him to be honest although I am open to doing less. Neither of us like to just sit in though.

@Nosdacariad That is good advice. I am a bit wary of asking him in too much detail about his financial history. He earns less than me but he seems to struggle more financially than I would expect given his outgoings. I never even thought about retirement. Thank you, a lot to think about and it sounds like you have had some hard won lessons in this area, I appreciate your insight.

Neither of us like to just sit in though.
So either he cuts back on his expensive hobby, you don't go out as much or you pay a bigger part towards your social life. Can you see which option he'd prefer?

@Justmuddlingalong I'm not sure, I will make a list of low cost activities that would still suit us without costing as much. Its something we need to talk about though.

I do have the scars to prove it 😅 We were/are 50s which makes the whole thing worse really.

I hear you about not wanting to pry, there are two, potentially three strands to this IMHO

1. If just dating so long as the dating is not to your financial detriment all good - unless you feel you'd be wasting your time with someone whose values don't align.

1. If moving in then a free & frank conversation is needed about ALL the potential dealbreakers - money, chores et c

May not be relevant

1. Is he being honest about the finances and is he honest about stuff in general?

It wouldn’t stop me from progressing if I liked someone but I would be wary.

I am just getting my finances sorted after a few years of struggling with too many Klarna uses, not budgeting well, etc, and it’s shit. I wasn’t in control of my finances despite earning well.

@Nosdacariad We are hoping this will be a serious long term partnership and we'd like to move in together so I think I am going to have to have that free and frank conversation and probably face any concerns of his as well and hope it doesn't do too much damage. I've worked to hard for the little I have to risk losing it though bad financial choices now. I think he is generally honest but he might have some shame around not having a lot of money. Thank you again for sharing your thoughts on this, its really helpful and I hope things are better for you now!

@IceStationZebra Thank you for that perspective, its true that anyone can get in a muddle with their finances and it doesn't mean they are a bad person it perhaps just means they need a bit of recalibration to get them back on track. I'm not perfect myself in this regard as I know I don't save as much as I should.

Thanks for your kind reply x

I have been somewhat foolish and taken advantage of but I've learned from it and the stupid tax I paid is less than I'd have paid if I went ahead with our wedding 😁

If you approach the conversation openly and with curiosity and listen carefully then if it doesn't go well that isn't on you.
You could frame it from the perspective of planning cheaper dates so spending can be more intentional for your futures?

I've made my own financial messes in the past (so no judgement on anyone for that) but discovering the extent of XF's money messes also uncovered a trail of neverending lies large and small on a range of topics that I couldn't get past.

The money thing for me was more about what it revealed about attitudes and values than income or net worth.

Someone who genuinely wants to sort things and genuinely takes responsibility will not be an issue, you'll know they're genuine because they'll suit action to word.

@Nosdacariad This is such a valuable and supportive post, I can't thank you enough. I can see what you say is true and I hope that it does just turn out to be that he's in a muddle with money as opposed to more serious underlying issues and lies. That must has been so painful to deal with.

I think I will try to approach it within the framework of having cheaper dates and doing a low buy year to get us both on a better financial footing for the future and I'll encourage him to open up without judgement so we can see where we are. I suppose how he reacts to all that will probably tell me what I need to know!

Thank you again!

If he moved in - wouid he pay towards the mortgage - if you split he could get his paws on your home /asset

I would be very wary of him moving in

for holidays /meals etc do you pay 50/50

would you out same amount into an account for bills /food etc

and most people don’t have a spare £1000

This screams poor financial decisions to me and actually it doesn't get better with more money coming in. The purchases just get more and more expensive. My ex earned substantial money and, yet, all he had was on credit - expensive cars on finance (three!), newest tech, holidays left right and centre. And zero money in savings. I earned four times less, yet he was asking me for money to tide him over almost every month.
If you are both a bit frivolous, it can work. If, like me, you are a saver, you'll just find the whole situation unworkable in a long run.

I use Klarna a lot, mainly for clothes shopping. If I’m not sure about sizing I’ll order a few things in multiple sizes. Using Klarna means I don’t have loads of money tied up while waiting for delivery, trying things on, sending them back and waiting for a refund. I more often than not pay everything off well in advance though.

He might not even be in a muddle, he might purely and simply prefer to pay something over 3 payments than pay the full amount off one wage. Its not an unusual situation. I used Klarna once to buy a pair of winter boots - I made the decision to get a really good pair, and while I could have got them from one wage, I just preferred to pay it over three. There was no detriment. If he has little savings he might just see it as spreading his costs, which is the point anyway (I know it doesn't work out that way for many).

I think you know that if you move in together etc you will need to speak about finances anyway. But I wouldn't necessarily assume the worst.

I have been through this before. It’s a real problem and it will lead to further issues

What’s wrong with klarna? I use it all the time, it’s interest free.

@usedtobeaylis & @50NotFat @Disturbia81 I do appreciate this perspective but I do think it isn't just something he's doing to to manage his money as I know many people do. My SIL pays for everything on her credit card and pays it off in full so that the money she has in her account will make maximum interest, which is probably why she could buy and sell most people. I know there is an issue as he literally has no savings and so is always paying stuff up.

If you read the full thread you will see it isn't just an judgement about Klarna but how its being used, its just a concern given other things going on.

It easy for people to get in a financial muddle and those pay in 3 aren’t helpful imo. I use them as a way to not have to spend actual money on online orders I’m likely to return some of (clothing basically) but otherwise it’s all too easy to buy a lot of stuff and then you can’t really afford to pay for it and you end up in a vicious cycle of all your money being used to pay off BNPIL and you can’t afford to buy anything so your BNPIL again etc etc.

Once you’re in a pickle like that it takes time, dedication and willpower to clean it up and change the habits in a longer term. It’s about impulse control as well as living with your means which is easier said than done for some people (including me - been there, made the mess, tidied it up - more than once).

from the POV of moving in together I’d worry that he will quickly be in a situation where he is unable to contribute properly to the household. I’d wager he will eventually prioritise his finances on his expensive hobby as you’ll always be there to pick up the slack on the bills, and you will as you don’t want the consequences for yourself.

I would have a frank talk with him to find out his attitude to finances. Financial issues are the number one cause of relationship/marriage issues. Do your due diligence up front.